RI ESG Briefing, July 19: PFA, Allianz Global Investors, Publica, New York City, Ethos, IMF

Environmental

PFA, Denmark’s biggest commercial pensions provider with DKK545bn (€73.2bn) in assets, is buying three solar photovoltaic (PV) plants in England from Danish developer European Energy – with the option of buying three more. “This is a very interesting investment, and it is one of the first steps in our new strategy which, among other things, involves a greater focus towards direct investments in renewable energy,” said Henrik Nøhr Poulsen, director at PFA Asset Management. He went on to say the solar parks hold a 20-year guaranteed feed-in tariff – helping to “ensure our customers a stable long-term return with a low risk in the current low interest rate environment”.

Allianz Global Investors’ AREF2 fund has agreed to buy the 12.8 MW Bohult wind in Sweden from Arise AB, the NASDAQ OMX Stockholm-listed wind firm where buffer fund AP3 has a 10% stake. The €19.1m deal is based on an annual production of 42.4 GWh and Arise will operate the facility for AllianzGI under a five-year asset management contract.

Switzerland’s largest public pension fund, Publica, has exited its equity holdings in coal companies, according to reports. IPE quoted Stefan Beiner, head of asset management as saying the fund had sold stakes worth some CHF10m (€9.2m) because of the financial risks posed by the firms’ vulnerability to public policy measures to combat climate change. ““Once a year, we look at risks that are difficult to quantify, which tend to be ESG risks, and last year we prioritised climate change,” he was quoted as saying.

Social

Social finance trade group Social Enterprise UK has called for a ‘breakaway unit’ for social enterprise and social investment in the wake of a wake of ministerial changes from new Prime Minister Theresa May. It said: “Social enterprises are businesses and need to be recognised as such by Government. We would like to see a breakaway unit for social enterprise, social investment and mutuals within the newly created Department of Business, Energy, and Industrial Strategy (BEIS).”

The Executive Board of the International Monetary Fund is calling on member countries to take gender diversity into consideration when nominating candidates for the position of Executive Directors and their staff. In the Executive Board’s first report on gender diversity to the IMF’s highest decision-making body, the Board of Governors, Executive Directors noted that improving gender diversity in the Executive Board would lead to a more effective IMF. The Board pointed to growing evidence that organizations governed by diverse boards are more successful. Directors also emphasized that staff diversity and inclusion enhance the quality of the Fund’s work and engagement with member countries.h6. Governance

The $59bn New York City Employees’ Retirement System has voted to divest its entire holdings of three American retailers because they sell guns, according to the New York Times. It said the fund voted on the move at its board of trustees meeting. It will sell its shares in Dick’s Sporting Goods, Cabela’s and Big 5 Sporting Goods. The paper said the holdings, worth $10.5m, are about 0.02% of the pension’s portfolio.

In its response to the consultation of SIX Swiss Exchange on the amendment of the directive on information relating to corporate governance (DCG), governance advisor Ethos has asked that the publication of an annual sustainability report become mandatory for listed companies. The amendment of the DCG proposed in the consultation launched by SIX only requires that companies that wish to publish a sustainability report must do so in accordance with an internationally accepted standard. In Ethos’ view, this proposal is unsatisfactory because it leaves the issuers with the option to not publish a sustainability report at all.

With the UK’s new Prime Minister Theresa May pledging to crack down on executive salaries with binding say on pay votes, PwC have issued a report that urges companies and their shareholders to take action on the highest payers before the Government intervenes. Recent polling by the professional services firm found that three-quarters of the public are angered by inappropriate pay packets for the UK’s corporate chiefs. It also found that the public underestimate the ratio of CEO to average worker pay: more than 60 percent of those PwC polled said executives should earn no more than 20 times any given employee, while the High Pay Centre reports the real multiple averages at 180 times.

Hermes Investment Management, the £24.1bn asset manager owned by the BT Pension Scheme, says its infrastructure team has acquired a 25.6% stake in London Stock Exchange-listed gas metering firm Energy Assets Group on behalf of clients in consortium with investment funds managed by Alinda Capital Partners, which acquired the remaining 74.4% stake in the firm.

The Church Commissioners, the UK faith investor, have again been highly rated for their work on Responsible Investment by the PRI. The Commissioners again received the highest possible rating (A+) in the main strategy and governance category. They received A ratings for responsible investment in listed equity, private equity, credit strategies and indirect property, as well as receiving a B rating for responsible investment in direct property. In addition this was the first year the Commissioners have received an ‘A’ rating for engagement and voting, in the wake of the ‘Aiming for A’ resolutions at Glencore and ExxonMobil.

Environmental research giant DNV GL has acquired Spanish solar monitoring firm GreenPowerMonitor. DNV said the acquisition would enable GreenPowerMonitor, which employs 56 solar software experts across Spain and the US, to gain access to its “larger global network”. The financial terms of the deal were not disclosed.